Effect of Urban Innovation on Land Finance Dependence: Evidence From 233 Chinese Cities

Abstract

Unlike most studies on urban innovation, which focus on the effects of land-use policies, this study investigates the effect of urban innovation (UI) on land finance dependence (LFD). In China, innovation-related policies are intended to create a shared business environment where new entrepreneurs can contribute to achieving sustainable economic growth. This study analyzes the spatiotemporal dynamics of LFD and UI from 2005 to 2019 using the spatial autocorrelation model and dynamic spatial Durbin model. It finds a positive spatial association between LFD and UI throughout the studied regions during the study period. It also reveals a significant inhibitory effect of UI on LFD and a negative impact on the LFD of neighbouring cities. Moreover, the inhibitory effects will increase over time. Lastly, this study shows varied impacts of UI on LFD in different regions, especially in eastern China. Important policy recommendations for high-quality development in China are provided.